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A recent article in i2’s Supply Chain Leader on how resilient companies can manage demand when the past is not a reliable indicator of the future had a great table that compared and contrasted demand tactics and strategies in stable vs. volatile economies that did a great job of summarizing the demand management strategies you need to weather the storm.
The following points from Recession-Resistant Demand Management Strategies and Tactics in particular are key:
- level and seasonality in volatile economy are best determined from the last 2-3 months, not 2-3 years
- constantly look for patterns that are different from expectations and make adjustments quickly
- it’s not just about consensus forecasting — triangulate multiple scenarios across functions against leading and trailing indicators to come up with near real-time forecasts
- combine and push-and-pull strategies to get the best results
- monitor continuously … today’s patterns will not be tomorrow’s
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A good article from last year’s Intelligent Enterprise covered six steps to better sales forecasting and demand planning. The process, which should revolve around the four critical components of people, process, information, and technology at its core, is straight-forward and a good guide for any organization that needs to improve its demand planning (since good demand projections are critical to getting good sourcing results).
- Conduct an SF/DP process and system assessment
Start with an independent and unbiased evaluation of your financial and operational performance planning processes and systems that establishes benchmarks for current effectiveness and identifies areas for improvement.
- Identify user requirements and project scope
Define the business requirements, develop clear definitions of information needs (for proper planning), and what product / service lines you will be addressing.
- Build a business case that improves value and results
Decide whether you need better systems, better processes, or both … then, once you’ve quantified the costs, outline the expected improvements in the results and build a business case that will define the expected value and ROI.
- Assemble the program and plan
Once you have approval, it’s time to define the implementation and change management program that will realize the expected benefits. Then determine the communication plan that will insure that each affected individual knows what she has to do, when, to insure project success as well as the value the program will deliver to them (to give them incentive to contribute to the overall success).
- Evaluate new technology against the program plan
As you are implementing the technology, you’ll need to evaluate its effectiveness. This will require specific product evaluation criteria that should be defined in advanced.
- Deploy the integrated SF/DP program and set of processes
Be sure to implement the new processes in a way that minimizes disruptions to the business, culture, and technology infrastructure.
The article also discusses a Maturity Model, the potential impact of failure, and the role that people, process, information, and technology impacts.